- The EU is to limit the number of hybrid electrical vehicles imported from China to 350,000 cars a year, the European Commission has confirmed.
- China's hybrid exports to the EU tripled to $7.5 billion in the first half of this year from $2.5 billion a year earlier, according to Chinese customs data.
- The quota will come into force in December and is expected to halve China’s market share in the EU, which currently stands at 6%.
- Since the EU imposed additional tariffs on Chinese-made EVs in 2024, Chinese automakers have increasingly turned to plug-in hybrids, which are exempt from the extra duties.
- Any cars imported above the quota level will not be subject to tariffs, but will remain blocked in customs at docks in Europe.
- As part of the deal, China has also agreed to drop some tariffs on auto parts and cut duties by half on footwear, olive oil, and ice-cream from the EU.
- EU leaders are set to discuss a French-German proposal for a 'kill switch' that would allow Brussels to block access to the single market for certain goods in the event of harmful occurrences.
The European Union has confirmed a quota limiting hybrid electric vehicle imports from China to 350,000 cars annually, effective December. This decision aims to address the rapid growth of Chinese hybrid sales, which surged to $7.5 billion in the first half of 2023, up from $2.5 billion the previous year.1236
The EU's move is expected to halve China's market share, currently at 6%, as imports have soared, with approximately 800,000 hybrids projected to be sold this year. The quota will be implemented under safeguard measures, allowing for swift action without lengthy investigations typical of anti-dumping measures.
Any imports exceeding the quota will face customs blockages but no tariffs, while Chinese vehicles assembled in the EU will be exempt. The agreement also includes China reducing tariffs on EU auto parts and other goods.5
Chinese brands like SAIC, BYD, and Chery dominate the hybrid market, accounting for over 90% of sales volume in the EU. The deal is seen as a de-escalation of trade tensions, with analysts suggesting it may push Chinese automakers to increase local manufacturing in Europe. Bill Russo, founder of Automobility, noted, "I would expect this to strengthen the incentive for Chinese automakers to manufacture in Europe."
As the EU and China continue discussions on various imports, the automotive landscape in Europe is poised for significant changes, with potential impacts on pricing and competition among brands.
“The quota, set to come into force in December, aims to halve China's current 6% market share, with any excess cars blocked at European docks rather than tariffed. China's hybrid exports to the EU tripled to $7.5 billion in the first half of this year, and Chinese brands captured a record 15% of Europe's EV market in the second quarter.”
The Guardian
